Looking for a Fair Deal on nursing home care

Pressure on funding for long-term care subsidy from government

When the time comes to choose a nursing home option for either you or a loved one, the last thing you want to have to think about is financial considerations. It is for this reason that the so-called Fair Deal was introduced in 2009, with the aim of providing “anxiety-free” nursing home care.

Since then however, the scheme has been the subject of some serious problems, including running out of money back in 2011. This left many elderly people with nowhere to go until the scheme resumed.

So how is the scheme working now? And what potential changes might be on the horizon?

What is the Fair Deal? First introduced on October 27th, 2009, to replace the old subvention scheme, the aim of the Nursing Homes Support Scheme or “Fair Deal” was to make “long-term nursing home care accessible, affordable and anxiety-free”, according to then minister for health, Mary Harney.

Under the Fair Deal, those looking to enter a nursing home will get a certain proportion of their care paid for. All nursing homes, both public and private, are eligible, provided that they are approved by the National Treatment Purchase Fund.

Who is eligible? To be able to participate in the scheme, you must be ordinarily resident in the State and assessed as needing long-term nursing home care. This assessment includes monitoring your ability to carry out the activities of daily living – eg bathing, shopping, dressing and moving around. The scheme is only eligible for those aged over 65.

How do you apply? There are three steps involved in an application under the Fair Deal. Step 1 involves completing a care needs assessment to determine whether you need long-term nursing home care; Step 2 is a financial assessment to assess your contribution towards the cost of your care; and Step 3 involves the Nursing Home Loan.

Can I choose my own nursing home? The list will include public nursing homes, voluntary nursing homes and approved private nursing homes. According to Tadhg Daly, chief executive of Nursing Homes Ireland, all but two nursing homes across Ireland have been approved for the scheme. The home of your choice must have a place for you, however.

How much will nursing home care cost? This all depends on the results of a means test. Under the Fair Deal, you are required to contribute 80 per cent of your assessable income, which includes all earnings such as pension income, rental income, social welfare benefits, etc.

In the case of a couple, total income will be divided in two. So, for example, if a couple’s weekly income is €1,000, and one member is applying for the Fair Deal, then the 80 per cent charge will be imposed on half of this income, or €500.

In addition, 5 per cent of the value of your assets (including savings) will be deducted each year, although the first €36,000 of your assets (€72,000 for a couple) will not be counted.

The value of your home will only be included in the first three years, as there is a 15 per cent cap on the value of your principal residence. This applies whether you stay in a nursing home for three years or 15 years.

According to the HSE, this works out as an average contribution of €275 per week or €14,300 a year per person. The average cost to the HSE is about €700 a week.

However, change is coming. In last December’s Budget it was announced that the cap will be pushed up to 22.5 per cent, although this will require amending legislation before it can be introduced.

The increase shouldn’t come as a surprise, given the pressures on the public finances and the collapse in the property market. “They hadn’t bargained for the fall in property prices,” says Eamonn Timmins, head of advocacy and communications with Age Action Ireland.

But the increased charge may not be imposed just on new entrants into the scheme. If you have been in the scheme for some years, the possibility has been raised that you could be liable to pay the higher amount.

What if I can’t liquidate my assets and don’t have the funds to cover the 5 per cent charge? This is where the Nursing Home Loan comes in. This feature of the Fair Deal allows you to defer the annual 5 per cent asset contribution until after your death. The asset/ property must then be sold and the State repaid via the Revenue Commissioners.

Opting for this approach requires a charging order on your mortgage and there are also strict timeframes that must be adhered by. In the event of your death, the loan must be repaid within 12 months, or if the property is sold during your lifetime, it must be repaid within six months. Failure to do so will result in interest being levied on the loan.

Does the Fair Deal cover all the costs associated with nursing home care? No, it doesn’t. The HSE’s agreement with private nursing homes provides for the payment of costs associated with bed and board charges. Additional expenses, such as physiotherapy, incontinence wear, transport and specialised wheelchairs are not covered by the scheme. If you have a medical card, then this should cover such costs but if you don’t, you will have to fund these costs yourself.

How much money is available for the Fair Deal? In 2011, the scheme was temporarily suspended when it ran out of money and additional funding had to be found to allow it continue. This year, almost €1 billion (€998 million) has been allocated for the scheme, but the plan is to provide 22,761 beds nursing home beds – that’s 850 fewer than last year.

This may not be sufficient to meet demand, and the HSE has alluded to the creation of a “placement list”, whereby new places in a nursing home would be offered as funding became available. For Timmins, this “placement list” amounts to the same as a waiting list.

“If you qualify you will take your place in line. That would concern us,” he says.

“In effect it’s a national waiting list, which means that you’re likely to be only approved for payment once someone checks out of a nursing home or if someone dies,” agrees Daly.

Is there anything I can do if I have to wait? If you want care for yourself or a relative sooner rather than later, and you find yourself or your relative ending up on the HSE’s “placement list”, you always have the option of paying for care privately. According to Daly, rates vary from about €800-€1,200 a week, and while this can add up pretty quickly, remember you can claim it back against your tax, either for yourself or a relative.

How long does it take to get approval? It depends. The Government recently said it took about four to six weeks, although this might be referring to approval for the scheme – rather than saying that the HSE had the funds in place for you to take your place. Indeed, Timmins notes that people have received letters declaring that their application has been approved but that the HSE is now “awaiting resources”.

What am I entitled to if I want to stay in my own home? Very little, according to Catherine Cox of the Carers Association. She says that you might be entitled to somewhere between €190-€500 a week but this depends on where you live.

“If you live in a different part of the country, you might not get any package. There are huge inconsistencies because there’s no statutory entitlement,” she says, adding that the association would like support offered under the Fair Deal extended to community care.

It all sounds a bit complicated . . . If you think it all sounds a bit complicated, that’s because it is. If you have a very straight-forward financial situation whereby you own your own home outright and rely on the State pension for your income, it shouldn’t cause any problems. If it’s a little bit more complex than that however, you should be prepared for the process to take some time.

“No two people’s estates are the same and some people are better at providing the paperwork needed,” notes Timmins.

For example, there are certain protections inherent in the scheme for farms and businesses to ensure their sustainability, although if you have transferred assets five years before going into a nursing home, they will be taken into account in the financial assessment.